Im looking to purchase a condo in the next few months and need some advice on the type of loan I should get. My lender suggested getting a 85/15 100% financing loan (30 year fixed). Im looking in the $90K - $110K range, and just trying to evaluate what the best option would be. I plan on putting about 5% down. The problem I have is the Condo HOA fees. The range is about $185 all the way up to $450 Some of these are all bills paid, others include everything but utilities. The average is about $250. Need some advice.... thanks!
If you are putting 5% down and want to avoid PMI and escrow, then I would do the first mortgage for 80% and a second for 15%. Your loan officer should be able to provide you with several options.
Interest rates are overall low right now, compared to historical rates. I would do a fixed rate for sure. However, I would suggest a 15 year loan over a 30 year loan. It is not that much more per month & you get it paid off in half the time. The Condo HOA fees do suck, but if you want a condo you are stuck with those. Just be sure to look around, some are cheaper than others.
What if I decide to pay off my 30 year earlier? I have the no penelty clause in my loan. How does that work If I pay say $5000 extra per year?
Get the 30 year note but make the 15 year payment. It gives you the flexibility of a lower payment if something should come up. Another way to half the loan period is to send in twice the principle payment needed. All mortgage payments are broken down into the interest part and the principle part. All you need to do is double the principle part in the payment. The total payment should start out lower than the 15 year note payment but end up higher.
